The Real Estate Council of Ontario wants double ending prohibited.
“There’s a key concern that has arisen and become an issue in real estate, not only in Ontario but in other provinces as well, and that’s around multiple representation,” said RECO’s Registrar Joseph Richer.
“You are providing services to the buyer and the seller and we believe that’s a conflict of interest—that you can’t serve two masters in that situation—and we’ve made recommendations to the government that they change the rules around when that’s permitted.”
The proposed reform to the Real Estate and Business Brokers Act—which RECO administers for the provincial government—would introduce mandatory designated representation for buyers and sellers involved in a real estate transaction.
Additionally, RECO would like to see the government implement stronger standardized disclosure clauses that elucidate to consumers what multiple representation actually means.
Moreover, RECO would like to see the definition of “customer” change.
“The seller, your client, is on one side and I’m the customer on the other side; everything that I tell you as a customer you have an obligation to tell the seller, but everything the seller tells you, you cannot share,” said Richer. “How many people do you think who understood that would ever enter a customer agreement?”
The conflict of interest primarily stems from the fact that sellers try to maximize the amount of money they receive, while buyers prefer paying the least amount of money for their purchases. Richer says the two cannot be reconciled.
“Those are competing interests and I just don’t understand how one person can serve both interests in the biggest transaction of most people’s lives. That’s at the nub of the conflict.”
However, in tiny rural communities, double ending is common, and Richer says the government can manage exemptions.
“We understand that there may be some exceptions that are necessary to the mandatory designated representation set up,” he said. “Other jurisdictions have done this where they have exemptions for specific situations. One might be in small, rural areas, but we’ll have to define how small ‘small’ is.”
But not everybody believes there’s a conflict of interest with double ending—provided it’s been disclosed. According to the head of the Starke Realty Team, double ending shouldn’t be proscribed.
“Sometimes it’s in your client’s best interest to double end a deal,” said Brett Starke. “If you tell your client you’re double ending and you’ll give them a commission break, and somebody has a matching offer—and also knows you’re double ending because you’ve disclosed all that—then it’s in your client’s best interest to go with you because it will save them money.”
Starke is emphatic that everything must be disclosed.
“As long as everything is disclosed properly and everyone’s in the loop, and in agreement, it should continue,” he said. “But if an agent doesn’t disclose double ending or that they’re giving a commission break, or giving other people a fair chance, that’s another story. But if everything is done by the book, there’s no problem with it.”